Main menu

Netflix announces price hike

Shares of Netflix hit a record high of $194.39 per share yesterday, on the heels of the streaming-video service announcing a $1 to $2 monthly price increase on its two top subscription plans.

Where the Premium plan used to cost users £8.99 a month, it is now priced at £9.99 a month.

UBS analyst Doug Mitchelson said the timing of the price increase coincides with what his firm expects will be a strong fourth quarter content slate that could help minimize churn.

Most of the subscriber growth came from outside the US, where Netflix has invested heavily in establishing itself as a global television service.

The world's largest subscription video streaming service last announced a price increase in October 2015 for new customers in the United States, with the rise kicking in for existing customers a year later.

According to TV Guide, the increase comes as the streaming service puts more money into developing Netflix produced shows and movies.

Netflix Inc. quietly hiked the cost of two of its subscription tiers slightly on Thursday. Netflix will begin notifying members of the change on October 19.

The basic service - allowing one screen at a time - will still stay at $7.99 a month. You will have at least 30 days of notice until your bill goes up, and so the actual date when you'll start paying more will vary a bit depending on your personal billing cycle.

Will you stick with Netflix through the price hike or is this a deal breaker for you?

The price change is the first increase by Netflix in two years. The company is spending around $6 billion on programming this year, projected to rise to $7 billion in 2017. In 2011, they offered a DVD and streaming service for under $10.

But the new revenue will only come if Netflix doesn't lose a ton of subscribers because of the price increase.